Supreme Court orders review of the Maharashtra Slum Areas (Improvement, Clearance, and Redevelopment) Act, 1971

While hearing the Yash Developers vs. Harihar Krupa Co-Operative Housing Society Limited & Ors. case on July 30, 2024, the Supreme Court (SC) bench asked the Chief Justice of the Bombay High Court to constitute a bench to initiate suo motu proceedings for performance audit of the Maharashtra Slum Areas (Improvement, Clearance, and Redevelopment) Act, 1971. The matter was heard by a two-judge bench of the SC consisting of Justice PS Narasimha and Justice Aravind Kumar. It said, “Assessment of the working of the statute to realize if its purpose and objective achieved or not is the implied duty of the executive government. Reviewing and assessing the implementation of a statute is an integral part of Rule of Law. It is in recognition of this obligation of the executive government that the constitutional courts have directed governments to carry performance audit of statutes.”  

During the proceedings, the SC bench observed, “Legal reform through legislative correction improves the legal system and it would require assessment of the working of the law, its accessibility, utility and abuse as well. The Executive branch has a constitutional duty to ensure that the purpose and object of a statute is accomplished while implementing it. It has the additional duty to closely monitor the working of a statute and must have a continuous and a real-time assessment of the impact that the statute is having…The purpose of such review is to ensure that a law is working out in practice as it was intended. If not, to understand the reason and address it quickly.” 

In this case, the appellant was appointed as a developer by the respondent, a co-operative Housing Society of slum dwellers having their hutments on the subject land which was declared as a ‘slum area’ under the Act. As the development was unduly prolonged for over 2 decades, the development agreement in favor of the appellant was terminated by the Apex Grievance Redressal Committee by its order. The order of termination was challenged by the appellant before the Bombay High Court. It formulated certain issues and highlighted the limited scope of judicial review under Article 226 of the Constitution against the decision of the statutory authority. The High Court, however, proceeded to examine the facts in full detail and dismissed the writ petition on facts, as well as on law. 

The HC observed that an inordinate delay is a sufficient ground for the removal of a developer.  It added, “There is neither any perversity nor any illegality in the findings as recorded by both authorities…, in observing that the petitioner had grossly delayed the implementation of the slum scheme in question.” The matter was therefore mentioned before the top court. The SC bench pointed that the delay of 8 years in resolving disputes with a competing builder cannot be a justification under any circumstance. It added that the appellant is a developer and fully understands the process of obtaining environmental clearances while other sanctions and permissions are pending, and it is for him to make all the necessary arrangements. To say the least, the non-cooperation of some of the members cannot be a ground for delaying the project from 2014 to 2019. 

Moreover, the top court observed, “The findings of the AGRC and the High Court are very clear, they have correctly held that the delay caused due to the sanction of the draft DP for the construction of the road cannot be a justification for delaying the project from 2015 to 2019.” The SC bench, therefore, said, “There is no merit in this appeal,” and dismissed the Civil Appeal arising out of the special leave petition. Lastly, the SC bench illustrated, “considering that the Act is a state-legislation, implementation of which lies with the State of Maharashtra, and till date, no comprehensive statutory audit has been undertaken, we request the Ld. Chief Justice of the Bombay High Court to constitute a bench to initiate suo motu proceedings for reviewing the working of the statute to identify the cause of the problems…” 

The bench added that the bench constituted by the Bombay HC “will hear the government, the statutory authorities, the necessary stakeholders including intended beneficiaries and perhaps take the assistance of some senior members of the bar specializing in this area as amici curiae. We leave it to the High Court to devise such methods as it deems fit and appropriate. Having examined the matter, the bench may consider directing the government to constitute a committee for performance audit of the Act.”